JANUARY 2019 • COUNTRY LIFE IN BC


9 Milk stocks rebuild but skimmed milk an issue


Dairy producers also consider need for liability insurance


by DAVID SCHMIDT VANCOUVER – After


lagging behind demand for over a year, Canadian milk production is finally meeting the requirements, BC Milk Marketing Board chair Ben Janzen told producers attending the fall producer meeting in Vancouver, November 30. “We are starting to rebuild


stocks,” Janzen said. The 2017-18 dairy year (which ended July 31) saw Canada 0.49% over quota, but it has since slipped back a little. “As of September, national


production was 1.05% below the quota,” Janzen reported. Although BC has stuck


pretty close to its quota the past few years, the rest of the Western Milk Pool (WMP) habitually underproduces. In December 2017, production hit a low with Alberta, Saskatchewan and Manitoba all at least 5% below their quota. For a


However, they are still better off than their counterparts in the east. Janzen notes higher- priced fluid milk represents 51% of processor purchases in the WMP compared to just 39% in the P-5 (Ontario-East). “That gives us a better blend price in the West,” he stated.


But increased demand for industrial milk means increased milk solids non-fat (SNF), a low-value product. “The WMP skimmed 31 million litres last dairy year,” BCMMB general manager Rob Delage reported. “That’s not what we want to do.” Siemens says new


processing plants in BC and Manitoba last year have eliminated skimming for now but it remains a threat going forward. Moreover, since capacity has increased in only two of the four western provinces, interprovincial milk shipments have increased. Alberta milk flows into BC and Saskatchewan, while


while, that was a good thing, as there wasn’t enough processing capacity in the West to handle all the quota increases, BCMMB manager of market supply and development Woody Siemens said. As all BC producers know, quota increases have come fast and furious the past few years. Since most of the increases have come from lower-priced industrial milk products, producers have not seen their price increase along with the increased demand.


Dick Klein Geltink, left, receives congratulations from BC Milk Marketing Board chair Ben Janzen for his long career in agricultural politics, including the past six years as a BCMMB director. DAVID SCHMIDT PHOTO


“Every increase in the


“We need 1% to 2% growth a year to keep up to the increased imports. If we get that, we won’t need to impose quota cuts.”


Saskatchewan milk heads to Manitoba, with the transport costs borne by all producers in the WMP. Since processors are choosing to build single large plants in the West, rather than small plants in each province, shipping costs will continue to bite. Boosting butterfat content in milk is one answer to the problem.


butterfat percentage would help to offset skimming,” Siemens said. BCMMB


BCMMB GM ROB DELAGE


director Tom Hoogendoorn says BC milk now averages 4.3% butterfat, even though the BC herd remains predominantly


Holstein. Some producers would like to explore options for on-farm skimming. This is a good idea, Hoogendoorn agreed and one BCMMB is working on, but current government regulations don’t allow it.


Delage estimated concessions in recent trade deals represent lost revenues of about $190 million a year


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for producers. They may not be direct losses, however – simply lost opportunities, if overall market demand continues to grow. “We need 1% to 2% growth


a year to keep up to the increased imports. If we get that, we won’t need to impose quota cuts,” he said, adding he expects the market to grow by at least that amount so there should still be some small quota increases in future.


Group insurance Another cost facing


producers in the near future is the cost of liability insurance. “Just because we don’t


have it doesn’t mean we don’t need it,” BCMMB director of policy and industry affairs Zahra Abdalla-Shamji told producers, saying processors want producers to carry liability insurance of at least $5 million.


Since the BCMMB does not


actually own the milk, it cannot buy a blanket liability policy but Abdalla-Shamji is leading a consultation with producers to develop other potential options. That includes obtaining a group policy producers could access or finding a way to attach product liability coverage to existing farm insurance policies.


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